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Bitcoin Hash Rate Declines as Miners Switch Off Unprofitable Mining Rigs Post Halving

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Bitcoin’s hash rate has declined as mining firms eliminate unprofitable mining rigs.

This trend was evident after the Bitcoin halving in April.

Notably, the Bitcoin Network’s hash rate dropped to a two-month low of 575 exahash per second (EH/s) on May 10.

ALSO READ:Elon Musk Updates X Platform With New Grok AI

However, it made a small recovery to the current value of 586 EH/s based on data from blockchain.com.

Each bitcoin halving event reduces the rewards that miners receive by half of the original value.

Therefore, Bitcoin miners come up with techniques to stay profitable.

Bitcoin Miners Eliminating Unprofitable Mining Rigs.

1bottkle
Source: X

According to CoinShares Head of  Research James Butterfill, the declining hash rate is because miners are turning off unprofitable rigs.

Notably, the temporary decline was predicted on April 9 based on a report by CoinShares.

According to the report, the CoinShares model forecasts that the hash rate will rise to 700 exahash by 2025.

However, they predicted a 10% post-halving decline since miners would turn off unprofitable ASIC mining rigs.

The temporary reduction is linked to the increased costs of Bitcoin mining and rising electricity costs.

Therefore, energy costs are being optimized to increase mining efficiency.

Also, according to the COO and co-founder of TeraWulf Nazar Khan, only smaller mining operations with energy-consuming equipment will be discarded.

Notably, TeraWulf is the eighth-largest Bitcoin mining outfit in the world and is worth over $670 million.

Nevertheless, the profitability of mining operations is largely dependent on the electricity costs the companies pay.

Also, the S19 XP and M505++ are some of the older models that operate with high electricity consumption.

These older ASIC models operate at a loss because their electricity costs exceed $0.09 kWh (Kilowatt-hour).

Hashrate Index Index Shares Update on Bitcoin Mining Cost

According to a post by Hashrate Index on X, “S19 XP & M50S++ will operate at a loss if the hash cost rises >$0.09/kWh. >$0.08/kWh k Pros & M50S+ will be unprofitable.

And at $0.06-$0.07/kWh the S19j Pro+, j Pros, and M30S++ will struggle.”

So, these models will likely be discarded for those that are more energy efficient.

Therefore, Bitcoin miners will shift from the traditional models to newer brands that will reduce their energy consumption.

Also, BTC’s price has declined by 2% in the last 24 hours which is likely due to price volatility and rising costs for miners.

Nevertheless, several companies still find mining activities profitable using the right strategy.

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